Bgogo is new asset exchange, which the team states is being built: “to be the cryptocurrency exchange of the community, by the community, for the community.”
The key feature of the exchange will be the inclusion of supernodes with the authority to decide on new listings. Users will receive a rebate of 105% of their trading fees, paid in the native BGG token. The trading fees charged by the exchange will be used to repurchase BGG tokens which will then be burnt.
How advanced is the project?
The project has already raised $10 million in seed capital and $4.9 million in a private sale. The 21 contributors to the private sale will make up the first generation of supernodes.
No details on the development roadmap have been mentioned.
The whitelisting process is open from July 12th to August 7th, during which time 1,000 participants will be chosen to take part in the genesis mining event.
The genesis mining event will take place for 24 hours after the platform is launched. During this period 500 million tokens, or 5 percent of the supply, will be available to rebate trading commissions.
What are the tokens used for and how can the token value appreciate?
BGG tokens are used to pay mining rewards, and to choose super nodes. BGG token holders will also be eligible for pre-sale allocations from ICOs incubated on the platform.
10 Billion BGG tokens will be created, of which 50% will be made available as mining rewards. 20% will be used for ecosystem development, 20% will be reserved for the team and 10% will be allocated to the first generation of super nodes and to strategic investors.
Users will receive a rebate of 105% of the trading fees they pay, paid in BGG tokens within 30 minutes of each trade. Rebates will be paid each day until a daily cap is reached, after which trades will not be eligible for rebates. Mining rewards will be paid out over a period of 4 years, with the mining rewards decreasing over time.
Every 24 hours, 100% of trading commissions will be used to repurchase BGG tokens, and those tokens will then be burnt.
Every 90 days the 21 accounts with the largest BGG holdings will be elected to act as supernode for the following 90-day period. Each supernode will be able to choose one cryptocurrency to be listed on the exchange, subject to certain vetting requirements. The supernode will earn 20% of all trading commissions paid for that coin for life.
Team & Advisors
Only four team members are listed, though the whitepaper mentions a total team of 35.
The CEO, Maximilian Wang, is a former software engineer from Facebook. He is described as a blockchain researcher and influencer and was part of the team that set up Quark Chain (though he is not mentioned in the Quarkchain whitepaper).
The CTO, Nicolas Chen, is also ex Facebook where he worked on network security. COO, Oscar Song, is the former operations chief of Huobi. The CSO Ciara Sun has a background in financial analysis, strategic consulting and corporate management at BCG and Deloitte.
The remainder of the team have worked at Facebook, Microsoft, Alibaba, Twitter and Boston Consulting Group. It is not clear if any team members have experience building blockchain platforms.
No advisors are listed, though Node Capital, Sky9 Capital, Goopal Digital, and Hike Capital are mentioned as seed investors.
Essentially Bgogo is a crypto exchange that is using trans-mining, or trade mining, to build a user base. The business model is also incentivizing large investors to accumulate enough tokens to become a supernode. Supernode owners can choose a token to be listed on the exchange and then earn 20% of the commission generated by that token for life.
The whitepaper goes into no detail regarding the technology being used. There are also some aspects of the business that are not mentioned in the whitepaper, but have been mentioned in interviews.
One of these is the long-term vision for the exchange. Once a user base has been established, the platform will be used to incubate and list new ICO projects. This explains the fact that the platform does not appear to earn any revenue.
BGG token holders will be eligible for pre-sale allocations of ICOs incubated on the platform.
Strength and Opportunities
The combination of supernodes, and using trading commissions to repurchase and burn BGG tokens should create a strong underpin for the token price.
The project has attracted a large following through its proof-of-care program. The Telegram group now has over 80,000 users.
Weaknesses and Threats
Several aspects of the business model are missing from the whitepaper, including technology and governance.
The team does not have experience building or managing a trading platform or exchange.
Governance is a serious concern with this project. As per the information that has been provided, there is no way to know if trading commissions or BGG tokens will be used as indicated.
It is not clear that Bgogo has anything unique or proprietary to protect any market share it may achieve. The first exchange to rebate trading commissions to users was FCoin, which rebated 80% of those commissions. Bgogo is rebating 105% of trading commissions. This will give it an edge until another platform offers an even more generous rebate.
The hype factor means the exchange will probably attract a lot of new users when it launches. The long-term outlook is uncertain as governance may be a concern and there is no way for the exchange to fend off competition from similar platforms.
BGG tokens are sure to offer trading opportunities in the short to medium term, but investors should be aware that the business model will be vulnerable to competitors in the long term.
* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.